OLDS — Town council is still no closer to deciding how big the municipal tax bill for residential and non-residential taxpayers will be, even after two options were presented to them during a Nov. 27 meeting.
Instead, after discussing the matter for just under half an hour, council voted to have administrative staff bring the matter back for further discussion.
A more solid decision is expected during council’s Dec. 11 meeting.
During the Nov. 27 meeting, director of corporate services Sheena Linderman presented council with two options.
Option 1 was a combination tax increase and drawdown of the town’s tax stabilization reserve fund.
Linderman said in this option, because the assessed value of property in Olds has risen, the tax rate itself would fall by seven per cent for residential property owners and three per cent for non-residential property owners.
As a result, the average household in Olds would see a monthly tax increase of $7.83. Non-residential taxpayers would face a monthly increase of $48.
This option would increase tax revenue to the town by 4.8 per cent, or $483,570 and the town would draw $136,000 from its tax stabilization reserve.
Option 2 is a straight tax increase, leaving the tax stabilization reserve alone.
Under this scenario, the tax rates would still fall, due to the increased assessment values. They would fall six per cent for residential property owners and one per cent for non-residential property owners.
The result would be a tax increase of $9.92 per month for residential property owners and $59 a month for non-residential.
Linderman said that option would provide the town with a 6.14 per cent increase, or $619,570 to its tax revenue.
Councillors kicked the pros and cons of those two options around for a while.
Some liked option 1, others, like Coun. James Cummings, preferred option 2, saying the town should keep reserves as intact as possible for when major emergencies occur.
Coun. Heather Ryan saw the wisdom of that line of thinking but wondered what the ramifications would be if the town left the mill rate alone, “just going with it.”
The mill rate is the amount of tax payable per dollar of the assessed value of a property.
Administrative staff have said the increase in assessed value of property in Olds this year is likely to be in double digits, perhaps in the 15 per cent range for residential property owners.
Ryan said leaving the mill rate alone could give the town enough money to pay for all the items on its capital project list plus sock some money away in reserves.
She admitted the resulting tax increase could be quite a hit, but questioned the wisdom attacking the town’s issues in piecemeal fashion and having to do more later.
Coun. Darren Wilson said the struggle for him was the need to “balance fiscal responsibility with affordability.”
He admitted a double-digit increase, would be “very shock and awe, but would be very representative of the dire situation we're in from a revenue and infrastructure perspective.”
However, he viewed keeping property taxes low as one key tool – among others – to attract residents and businesses to the community. He said they like certainty, not surprises.
Cummings agreed with that thought but said what could scare off investors more would be a perception that the town isn’t looking after its infrastructure and assets properly.
He said Olds’ property tax rate is among the lowest of similar communities surveyed by the town and he pointed out that the town, like its residents, is faced with high inflation.
Cummings also noted the town faces some extremely expensive issues that need to be dealt with like water loss that is expected to cost $2.3 million this year.
“We have to get this sort of thing under control. The only way to do that is to spend the money necessary to repair it,” Cummings said.
“The only way to get the money to do that is through fees and taxes. Those are the only revenues we have as a municipality.
“It is the bare minimum budget. There's no frills. There's no golden arches being constructed, just the bare minimum that we need to get this stuff done.”
Cummings said that while Ryan’s scenario could hit some people very hard financially, he calculated that increases in the range of $360 to $380 on an average tax bill would not be “insurmountable.”
“It can be challenging to some people, but for the average citizen in Olds it’s not,” he said.
Coun. Harvey Walsh spoke in favour of option 1.
“I mean, we're going to have to think holistically,” he said. “We complain about not having affordable housing but keep driving up the price of housing with taxes.”
Thus, he liked the idea of setting the tax increase at 4.6 per cent and tipping into the tax stabilization reserve.
“I have no problem using that to help people out,” he said.
Coun. Dan Daley agreed that reserves are available to cushion the blow and that life is pretty expensive for residents nowadays.
He worried that if reserves are depleted too much, they won’t be there when really needed.
As a result, he said he’d like an option with rates between those offered in options 1 and 2.
Coun. Wanda Blatz agreed with the idea of ensuring reserves are managed so that there’s enough money for financial rainy days.
But she also reminded her colleagues of the old saying, that “there’s only one taxpayer,” that residents also have to pay federal and provincial taxes.
So she too liked the idea of administrative staff bringing the matter back with some kind of third option.
Mayor Judy Dahl also liked the idea of a third option.
Blatz stressed that it’s not like the town hasn’t dealt with the need for infrastructure repairs or other work in the past, at least while she’s been on council.
“I know it's been done over the years, I've seen work around town," she said.
Linderman noted that the aim of the Nov. 27 meeting was to get a general sense of how council wants to handle the property tax question.
She pointed out that the final property tax bill won’t be set until the spring, after assessments are finalized and the provincial government sets the education tax rate.
Chief administrative officer Brent Williams noted that the education tax is a major driver of tax rates.
“It's something out of our control entirely,” he said.
